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Slick TV ads often make financial planning and wealth management sound simple, but it’s usually not. Managing wealth requires knowing a lot about highly technical topics, like taxes, government regulations, and finance as well as history, psychology and how to communicate with loved ones about sensitive issues. This article highlights some of the knowledge needed to manage wealth and why it’s often so daunting without the help of an independent personal financial advisor who is familiar with your situation.
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Understanding The Federal Reserve Mandate To End Inflation
The Federal Reserve System, the nation’s central bank, has a dual mandate to pursue maximum employment and maintain price stability. These two priorities are currently treated equally, but that was not always the case. In fact, the Fed’s bias toward maximizing employment was a critical driver of the stagflation that plagued the U.S. in the late 1960s and 1970s. Recognizing the need to balance price stability and maximum employment, in 1977, Congress revised the Federal Reserve Act.
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Fed Governor Kugler Details Inflation And Economic Outlook
The 12-month inflation rate, as measured by the personal consumption expenditures (PCE) index, was 2.6% in December, down from its peak of 7.1% in June 2022, and the six-month rate for PCE inflation was even lower, at 2%, which is the target rate set by the Federal Reserve.
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Why Rates May Not Be Cut Until June
The cost of a loan to buy a home, car, college education, and achieve the American Dream is staying the same for now. As expected, Federal Reserve Chairman Jerome Powell said the central bank did not lower loan rates following the Fed’s Wednesday, Jan. 31, 2024, policy meeting.
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Practical Suggestions For Achieving Your 2024 Resolutions
New Year’s resolutions usually fail because they‘re often too hard to achieve. After six months, only 10% of people who make resolutions achieve them or remain committed to them, , according to a study by Dr. Mark Griffiths, a Chartered Psychologist and Distinguished Professor of Behavioral Addiction at the Nottingham Trent University. What can you do to make financial, medical, or other personal resolutions more likely to be achieved?
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A Sign Of Progress In Solving U.S. Economic Problems
The Federal Reserve appears to be pulling off a feat most experts did not believe it could: ending its aggressive inflation-fighting campaign of 11 interest rate hikes without tipping the U.S. economy into a recession.
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Fed Keeps Rates Unchanged; Expects Easing In 2024
To promote transparency and free markets, the Federal Reserve System began publishing the opinions of the 19 U.S. central bankers that decide interest rate policy.
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Have You Logged Into Your Social Security Account?
Have you logged in to your Social Security account? Creating an online account at SSA.gov is an important first step in understanding your retirement income situation. However, only about 60 million of the 160 million individuals in the U.S. labor force who have Social Security accounts have created a way to access the Social Security Administration’s website.
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The Great Fake Out Of 2023 Is Poised To Extend Into 2024
All year long, the economy and stock prices have fooled experts and consumers, outperforming expectations month after month.
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Test Your Financial Planning IQ
The five questions below are a challenge meant to allow you to assess your knowledge of investing, tax and financial planning. If you have been following our news stream, this quiz draws on familiar ground. The answers are below.
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Planning Briefs
7 Signs The Economy Is Doing Better Than People Think
Published Wednesday, December 22, 2021 at: 8:26 PM EST
Consumer sentiment is depressed, and business owner optimism declined by 18 points in the four months between August and November. Amid the Covid-weary, inflation-battered economy, here are 10 signs the economy is doing much better than most consumers and businesses think.
The U.S. Leading Economic Index (LEI), has soared well beyond heights previously reached in modern history in recent months, and it surged again in November. The index of leading economic indicators is at an all-time high, suggesting the current economic expansion will continue into 2022 and may even gain some momentum in December and into the first quarter of 2022.
Household net worth has surged on stock market and real estate gains, according to newly released data from the Federal Reserve Bank. The dotted gray line shows the 5.8% average annual growth rate in household net worth versus the current reading, which has gone parabolic. Liquidity pumped up cash in Americans’ checking and savings accounts from pandemic aid stocks and home prices have soared. “The ‘wealth effect’ is something real,“ according to economist Fritz Meyer. “And it is doing something that it hasn't done since the last bubbles in both the stock market and real estate. When household net worth goes higher, it stimulates higher spending, which stimulates higher stock prices."
The latest financial obligations ratio from the Fed shows the percent of monthly after-tax income that the average household pays for fixed monthly obligations, such as a mortgage, car payments, utilities, and real estate taxes, is near a record low. This suggests there's more left over from monthly after-tax income available to spend on discretionary purchases.
Retail sales, which account for 30% of U.S. economic activity, have skyrocketed since the pandemic first hit in March 2020. Retail sales have not returned to their pre-pandemic growth trend, they’ve soared well beyond. Retail sales consist mostly of tangible products, as opposed to services. This indicates people may be spending more on goods versus services than they do historically because of Covid-19.
The Institute of Supply Management’s survey of business conditions monthly at service-sector companies has soared to a record high. The service sector accounts for 89% of U.S. economic activity and 91% of non-farm jobs. A forward-looking component of this index, which measures the flow of new orders, was also at a record, at 69.7.
Commodity prices recently hit a record high while initial unemployment claims plunged, causing Yardeni Research’s Boom-Bust Barometer to go parabolic. Shown here since 1966, the boom-bust barometer went bust when Covid hit the U.S. in February 2020 but in March 2020 when the recovery began, it soared and in recent months it’s soared faster and higher than ever before!
Dr. Yardeni designed the Boom-Bust Barometer to predict economic slowdowns before they become recessions and for predicting expansions before they become booms. The index divides the price of a basket of commodities by the number of initial unemployment claims, and it has a good track record as a reliable predictive tool. It’s current reading is consistent with expectations of a boom in the economy.
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